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The Spatial Fix Revisited

Erica Schoenberger
Department of Geography and Environmental Engineering, The Johns Hopkins
University, Baltimore, MD, USA;
schoe_e@jhuvms.hcf.jhu.edu
Introduction
I first met David around the time that The Limits to Capital was
published. In fact he gave me a set of galleys to read before disap-
pearing off to Paris for the summer. Little did he know that I had
intermittently earned my living in the past as a copy editor and
proofreader. Tragically, I didnt stop to think that this was the second
set of galleys and that the corrected proofs had long since been sent
back to the publisher. I was simply horrified by the mass of errors I
found and, stoutly determined to ward off this impending disaster, I
proofread the entire thing. But, I wanted to keep the galleys, who
knows why, so I laboriously transferred all the corrections by hand to
sheets of yellow lined paper and sent the resulting immense bundle
posthaste off to Paris. David, the soul of discretion, forbore to com-
ment, but I trust he was amazed. I comfort myself with the thought of
what posterity would have owed me had these indeed been the real
galleys.
The other contributors to this collection have mostly written about
what David and Limits have meant to them in the 20 years since the
books publication. All I can say here is that they have meant too
much for me to write about in public. So I have pursued the second
approach suggested by the session organizers, and I have tried to take
a look back at one of the key arguments of the book 20 years on.
The Spatial Fix, 20 Years On
It seems probable that the single best-known phrase from The Limits
to Capital is the spatial fix. It is a concise and elegant gesture to an
entire history of geographic structuring and restructuring under the
aegis of capitala history accomplished and a history in the making.
It also seems possible to me that it is often misunderstood. This could
be in part because of the intuitive appeal of the formulation, which
creates the impression that its meaning is more or less self-evident;
something like spatial fix must mean fixing the spatial distribution of
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things, hence relocation. It may also be in part because of the timing
of its entry onto the scene. Limits appeared at more or less the same
moment as other influential works focused far more specifically on
the contemporary restructuring of manufacturing industries in the
advanced capitalist economies and the relocation of some of this
activity to low-wage, underdeveloped regions of the globe. In this
context, I think that spatial fix became closely identified con-
ceptually with other formulations such as the new international division
of labor, deindustrialization and capital mobility, meaning, spe-
cifically, spatial mobility (see, eg, Bluestone and Harrison 1982;
Frobel, Heinrichs and Kreye 1980).
Theres no doubt that the concept of the spatial fix overlaps mean-
ingfully with these other ideas, but it is by no means limited to their
single notion that capital solves problems of profitability and politics
by moving from the problem location to new and more malleable
locations. That was about solving a profit squeeze caused by rising
costs in traditional industrial regions, especially labor costs, and
envisaged solving a spatial problem (the high cost of Place A) with a
spatial solution (relocation to Place B). Limits, on the other hand, was
constructing a general theory of capitalism in all its historical and
geographical complexity, not an analysis of the present crisis, and its
conceptual apparatus, including the spatial fix, was far richer and,
importantly, more flexible than notions such as the new international
division of labor.
The larger and more basic idea of the spatial fix is that it provides a
way to productively soak up capital by transforming the geography of
capitalism. Overaccumulation, of course, is the great problem of
capitalism that threatens its very existence. Because it is inherent in
the system, it is unavoidable over the long run, and the system is
periodically thrown into more or less violent crises during which the
excess is savagely devalued at great cost to people and places. But
although there is no permanent solution to the crisis tendencies of cap-
italism, the systemdoes generate some important ways of delaying them
or diverting them into reasonably productive pathways. Harveys great
insight in Limits was that restructuring the geography of capital
altering its very earthly foundationswas a particularly effective way
of productively absorbing these excesses.
This is the spatial fix. It is a very general notion that can have
different expressions historically and geographically. The geographic
spread of investment, output and consumption is one critical avenue
for the absorption of excess capital. Thus, incorporating more and
more of the territory of the globe into the ambit of capital, transform-
ing relations of production and ways of life on an expanding scale, and
generally trying to keep ahead of the shock wave of crisis are all ways
of accelerating the pace at which capital can be plowed back into
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428 Antipode
productive investment rather than uselessly piled up. If this works in
the short run, it of course magnifies the problem over the long run as
more and more capital is accumulated worldwide. Still, its better than
an immediate crash.
Another form of the spatial fix is the creation of an expanded and
improved built environmentinvestment in the whole suite of phys-
ical installations that sustain and enhance the systems ability to create
wealth. This includes, for example, transportation networks, water
supply, waste disposal systems, communications systems and the
like. The beauty of this form of the spatial fix is that it is so intensely
grounded. The investments required are typically large and long-
lived, so immobilizing a significant tranche of accumulated capital in
the earth while using it to support the further accumulation of capital.
Because of its temporal and spatial properties, much of this invest-
ment used to be considered the natural sphere of the state, but of
late that has changed dramatically with important consequences for
how the spatial fix may be playing out now.
Unsurprisingly, the spatial fix can be expressed in seemingly contra-
dictory ways, either by spreading capital out over the surface of the
earth or deepening its presence in place. It is impossible to predict
a priori what will happen and even apparently obvious expectations
for example, that capital will tend to flow from expensive to cheap
labor areasmay not be fulfilled in practice. This means that we must
continue to pay close attention to how it actually works.
The Spatial Fix in Practice
From talk of the new international division of labor to globalization,
our attention has been focused on the spatial fix as the geographic
spread of full-fledged industrial capitalism. Indeed, the conditions for
such a spatial realignment of capital from the core to the periphery
seem to be firmly in place. Commodities and investment capital do
flow globally and they do so ever more speedily and cheaply.
Improvements in transportation and communications mean that
money can literally flow worldwide at the touch of a button, and
that components manufactured in Taiwan can be assembled into a
product in Mexico and sold in Europe at an acceptable cost. Big
Macs, cell phones and CNN are inescapable wherever on earth one
goes. This must surely mean that capitalism has found a way to
resolve its problems of overaccumulation through its inexorable dif-
fusion over the surface of the earth.
Yet, we remain in many ways startlingly unglobalized. Direct invest-
ment, portfolio investment, output, trade and consumption are still
overwhelmingly concentrated in a relatively tiny part of the earth.
Three countriesthe US, Japan and Germanystill account for
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The Spatial Fix Revisited 429
some 60% of total global output. From 1953 to 1995, the developed
countries share of global manufacturing output declined from 95% to
80%. True, this is a decline and just what we would expect from a new
international division of labor. But note how small it is over nearly a
half century and how small compared to the share of territory and
population in the developing world.
Developed countries still account for roughly three-quarters of
merchandise trade, and most of the rest is accounted for by a handful
of Asian newly industrialized countries. Developed countries still
receive roughly three-quarters of total direct investment inflows and
the rest is again highly concentrated in a small number of developing
nations. The 49 least developed countries received 0.3% of direct
investment in 2000. The top 30 host countries, meanwhile, received
95% of inflows and possessed 90% of stocks in the same year. And, as
we all know, the developed countries consume vastly more than their
share of the globes output (Dicken 1997; UNCTAD 2001).
I dont wish to imply that people and nations have been left
unmarked by what we all thought was a global tide of capitalism.
Its remarkable, in a way, how much impact capitalism can have even
when it is hardly trying. But if there is a spatial fix operating here, it is
mostly not operating in the way we expected itthrough geographic
spread and relocation.
Why not? Quite probably, one reason is that it is harder than we
thought. Cheap transport and communications internationally and
cheap labor locally dont necessarily make up for poor infrastructure,
poorly functioning labor markets, difficult politics and extremely weak
demand in developing areas.
It seems quite possible also that there is a fundamental incompat-
ibility between vacuuming resources out of the developing world and
investing in it. In short, you cant effectively do both at the same time
and we have arguably concentrated on vacuuming resources out.
In his remarks to the conference sessions that gave birth to this set
of papers, David proposed a new termaccumulation by disposses-
sionto apply to the analysis of uneven geographical development. It
is a generalization of Marxs notion of primitive accumulation, one
that recognizes the continuing importance of wholesale transfers of
resources from certain areas or social groups that are not themselves
fully integrated into the capitalist system as a way of augmenting the
powers of accumulation of that system itself (see Harvey this issue).
Primitive accumulation seemed to be a necessary but bounded
moment in the history of capitalism that got everything up and
running and then faded away as an engine of development. Accumu-
lation by dispossession recognizes the continuing significance of asset
flows wrested from people and areas peripheral to the system. We
may feel very modern with our laptops and cell phones, but the
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ancient resource grabs are still going on and they still matter for the
system. Because the grabs are so big and because they matter so
much, they have plausibly displaced the possibilities for the orderly
development of genuine capitalism in the areas being dispossessed
perhaps not permanently, but at least until now. This may be con-
sidered another face of the spatial fix insofar as significant resources
are acquired cheaply in one part of the globe to sustain the general
process of accumulation centered elsewhere.
In short, the spatial fix of the latter half of the 20th century
continued to be more about the relocation of resources than of
investment, output, accumulation and consumption. But, of course,
it wasnt limited to this.
The flows of financial capital that ricocheted through a series of
tremendous booms and busts in particular hot spots of the global
economy since the 1970s can be seen as a series of frantic efforts to
soak up capital by moving in and out of different types of market in
different corners of the globe. Property booms in global cities such as
London, New York and Tokyo; ballooning debt in eastern Europe,
Latin America and Asia; stock market bubblesall may be part of an
attempted solution to the problems of the system through the sequen-
tial sectoral and spatial rerouting of capital flows. The very speed at
which the bubbles succeeded one another hints at the desperation of
the underlying situation. Their spectacular collapses, on the other
hand, hint at the futility of this effort.
Most recently, the spatial fix has taken on a new incarnation. This
involves the privatization of elements of the urban and industrial built
environment that used to be largely in state handseither as direct
producer or regulator of private monopoliesincluding transport-
ation infrastructure, telecommunications, energy supply, and the pro-
vision and management of environmental inputs and wastes (eg water
supply, wastewater treatment, solid waste management). The World
Bank describes the privatization and internationalization of these
sectors as a revolution, so we must take it seriously (Sader 2000).
The sectors involved with environmental management have become
more internationalized and more consolidated over the last decade or
so. Although much attention has focused on privatization of, for
example, water supplies in developing countries, it is again the case
that most of this investment has been highly concentrated in the
developed countries where a lot of existing infrastructure is available
to be acquiredoften at extremely good prices from friendly govern-
ments, environmental regulations ensure a growing market, and high
incomes ensure effective demand (Schoenberger 2003).
The private sector has long been involved in these activities as
provider of materials and services, but ownership of the underlying
assets, when not in the hands of a regulated monopoly, seemed better
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The Spatial Fix Revisited 431
vested in the state which could absorb the tremendous turnover times
on the necessarily large investment. The infrastructure was necessary
to private accumulation in other spheres, but not itself easily adapted
to the normal rhythms of capital accumulation.
Some of those constraints have been relaxed in various ways,
including deep discount pricing and innovations in financing,
although it is still unclear how the risks inherent in these financial
vehicles will be managed in practice. Another important factor was
the rise of conservative regimes that saw the states role to be pri-
marily in support of private accumulation and that were uninterested
in the social exclusions that would accompany the states withdrawal
from these spheres of activity.
The result is that the built environment and the natural environ-
ment have been simultaneously opened up to capital in a new way.
Because the data are hazy, it is remarkably difficult to estimate the
size of the environmental management and services market, but a
good guess seems to be somewhere in the neighborhood of US$400500
billion per year in revenues (European Commission 1999:5; US
Department of Commerce 2000:2028). It is plain that the need for
public and/or private investment in this sphere in the developing
countries is painfully acute. International private investment in these
sectors is also growing enormously. Yet, there is every sign that it is
overwhelmingly concentrated in western Europe and North America
(Schoenberger 2003).
In short, I think we are seeing a new version of the spatial fix. It is
highly concentrated geographically. It is also laying the groundwork
through amplification and improvement of essential physical infra-
structure and environmental servicesfor new rounds of productive
investment when enough of the existing overhang of surplus capital
has been written off. This new growth will be tied to these highly
concentrated, firmly grounded investments. The new version of the
spatial fix, then, promises even more inequality, an even starker
division between the developed and the underdeveloped than we
witness at present. Limits didnt, perhaps, specifically foresee this
version of the spatial fix or its consequences. But it did accurately
foresee that there were many possible versions, each with its own
contradictory and painful repercussions. Therein, I think, lies the
importance of continually revisiting the idea to see how it is working
out in different historical periods and historical circumstances.
Conclusion
The Limits to Capital has been taken, in a sense, as the last word on
the historical geography of the capitalist system. But it is not. Limits
opens up a whole range of vital questions about how the system works
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432 Antipode
and what this means, and it offers us critical guidance in analyzing
these questions. It offers no final answers, however; indeed it cannot
and the book is quite clear on this. The dynamics that it describes are
contradictory and they produce conflict that is worked out by real
people in their real lives. These contradictions and conflict will never
go away so long as the system exists. How people live them and
struggle against them, the resources and strategies they bring to this
struggle, the constraints that hamper them, their successes and fail-
ures and renewed effortsthis is history in the making. The beauty of
Limits, as I see it, is that it invites us all to join in the effort to analyze
this history, to understand its deepest meanings, and to do our own
share of history making. This task will never be finished; that much,
anyway, is certain. Accordingly, I would venture to predict that the
value of Limits will never be exhausted.
References
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Dicken P (1997) Global Shift. 3rd ed. New York: Guilford
European Commission (1999) The EU Eco-Industrys Export Potential. Final
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Frobel F, Heinrichs J and Kreye O (1980) The New International Division of Labor.
Cambridge: Cambridge University Press
Harvey D (1982) The Limits to Capital. Oxford: Blackwell
Sader F (2000) Attracting Foreign Direct Investment into Infrastructure: Why is it so
Difficult? Washington, DC: World Bank
Schoenberger E (2003) The globalization of environmental management: International
investment in the water, wastewater and solid waste industries. In J Peck and H
Yeung (eds) Remaking the Global Economy: Economic-Geographic Perspectives.
London: Sage Publications
UNCTAD (2001) World Investment Report 2001: Promoting Linkages. New York: UN
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